MasterCard snaps up UK-based VocaLink for £700m

MasterCard has swooped in for payments technology platform provider VocaLink, paying £700m for the fintech company.

Amid an increasingly uncertain time for fintech companies in the UK, MasterCard made a move for VocaLink, securing 92.4pc of the company for around £700m.

The remaining 7.6pc remains in control of “a majority of VocaLink’s shareholders”, for three years at least.

Political upheaval

The uncertainty in the UK stems from the Brexit vote, which will eventually lead to a withdrawal from the EU, throwing union-wide banking licensing procedures up in the air.

Earlier this week Business Insider published what it claimed was an internal memo from Deutsche Bank that seems to show just how wary financial institutions are of staying in the UK.

Add to that the dramatic drop in value of the UK pound and buying up UK companies may never have been easier – getting value in the UK market could also be very 2016.

“We’re excited about the opportunity to play a bigger role in payments in the UK, a very strategic market for us,” said Ajay Banga, president and CEO of MasterCard.

“VocaLink is a unique company with outstanding technology, assets and people. We look forward to investing in and maximising the technology, and embedding it in our products and solutions, both in the UK and around the world.”

Major player in its own right

Based in London, VocaLink operates key payments technology platforms on behalf of UK payment schemes. This means it provides the service behind direct credit and debit payments between banks, as well as direct account-to-account services between mobile purchases.

In 2015, the company reported revenues of £182m as it processed more than 11bn transactions.

Partnerships between major financial companies and smaller, newer businesses surfaced as the most likely future of banking when we looked at the industry earlier this year. However, major acquisitions such as this continue to be an option.

Earlier this week, another major UK company – though not involved in fintech – was bought out by a foreign business. Cambridge-headquartered ARM Holdings, whose chips power most of the world’s bestselling smartphones, is to be acquired by Japan’s SoftBank for £24.3bn as part of a big bet on the internet of things.